Vestwell’s 401(k) digital recordkeeper service will now be offered as part of JP Morgan’s small business retirement plan offering as SECURE 2.0 and state mandates aim to increase workplace retirement plan creation, the firms announced Thursday.
JP Morgan selected Vestwell’s platform to be offered as part 0f Everyday 401(k), the JP Morgan Chase small business workplace savings platform, according to the announcement.
“As the retirement industry is experiencing unprecedented growth, we remain committed to offering best-in-class solutions for our clients,” Steve Rubino, head of retirement at JP Morgan Asset Management, said in a statement. “Enhancing our offering by coupling a modern technology platform with an assigned client success professional, like Vestwell, will enable us to quickly and efficiently meet the increasing demand. Small businesses are seeking affordable and tech-forward retirement plans in record numbers, and we are proud to be able to deliver for them.”
Vestwell has experienced “unprecedented demand” from advisers that want to offer retirement plans to clients, Aaron Schumm, founder and CEO, at Vestwell, said in a statement.
“These new partnerships and integrations signal the rapid growth across the savings industries with strategic interest from the world’s leading advisory and asset management firms,” Schumm said.
Previously Vestwell has also expanded its distribution partnerships with top advisory firms including Commonwealth Financial Network and Cambridge, the release adds, and to offer a “seamless recordkeeping solution for advisors and small businesses, the firm has expanded API [application Programming Interface] integrations with leading payroll providers Gusto and Intuit QuickBooks.”
Vestwell currently is used by 30,000 small businesses, one million retire savers and $27 billion in assets in all 50 states, according to the company.
JP Morgan retained the firm’s small business recordkeeping market business, following the sale of the large-market recordkeeping division to then-Great-West in 2014.
A spokesperson for JP Morgan says the firm does not disclose assets under management in defined contribution plans, revealing “we have 1,700 Everyday 401(k) plans funding or in onboarding [with] the typical Everyday 401(k) plan currently [at] less than 20 participants.”
Almost three-quarters of workers 73% agreed or strongly agreed that they expect employers to offer a 401(k) or 403(b) plan because of the tight labor market and 98% of respondents think it’s important for their employer to offer a retirement benefit for employees at the workplace, Vestwell research found in February.
Small businesses are concerned about drawing and retaining top talent, but often not enough to pay for a workplace retirement plan, according to Fidelity Investments research released Thursday. About half (48%) of small businesses with 99 or fewer employees who do not offer a workplace retirement plan said they cannot afford it, according to a March survey of 504 small business owners. About 22% of small business owners said they were too focused on running their businesses to start a plan, and 21% said they do not know how to start the process of offering a retirement plan. Currently, about 34% of small businesses currently offer retirement savings to employees today, according to the study.